By Mark Samuelson | Denver Gazette
While Colorado is earning praise from climate advocates for its new mandates to reduce greenhouse gas emissions, developers and their economists are giving D and F grades to the state and its capital city, blaming the regulations for a noticeable decline in some projects.
Representatives for developers and property owners are flagging new data showing a marked drop-off in investments and revenues from commercial projects in Colorado. That decline, they said, follows directly on the heels of Colorado’s adoption of some of the nation’s boldest carbon-reducing strategies.
The regulations include the Energize Denver ordinance, adopted unanimously by the Denver City Council in 2021. The ordinance seeks to reduce carbon emissions from larger commercial buildings by 30% by 2030 and by 80% by 2040.
Then in 2023, the Colorado Air Quality Control Commission issued its own, statewide carbon-reduction package known as Reg 28, after a landmark climate bill was passed by the legislature in 2021.
Impacts of both measures are now looming in the windshield of investors, property owners and developers, as they decide whether to invest in large properties here and put a pencil to costs.
Last year, industry groups filed a lawsuit against both initiatives, but a federal judge has now dismissed that action. Meanwhile, in early March, Denver Mayor Mike Johnston announced a loosening of deadlines and penalties cited in the Energize Denver mandate.
‘I can’t do business in Denver now’
Neither correction is likely to curb complaints by owners and developers, as they weigh the impacts on the health of the state’s economy, several experts told The Denver Gazette.
“I’m the biggest evangelist that Denver has ever had, and I can’t do business in Denver now,” developer Andrew Feinstein, the CEO and managing partner of EXDO Group, which is heavily involved in Denver’s burgeoning RiNo district, told The Denver Gazette last week.
Feinstein is among a number of developers, owners, brokers and trade representatives who have spoken out, as costs of the regulations take shape.
A new study released by NAIOP, which represents the national commercial real estate industry, shows a sharp lag in economic contributions to Colorado made by the commercial development sector, in comparison to those of similar Rocky Mountain states that lack the ambitious carbon initiatives.
One year ago, NAIOP’s 50-state data showed that the input to Colorado’s broader economy from development and improvement of hotels, apartments, large retail and offices totaled $14.81 billion. NAIOP’s newest data indicate that contributions here from that sector fell to $6.67 billion last year, a 55% drop.